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https://www.wsj.com/articles/alameda-ftx-executives-are-said-to-have-known-ftx-was-using-customer-funds-11668264238

◆ WSJ NEWS EXCLUSIVECRYPTOCURRENCY

Alameda, FTX Executives Are Said to Have

Known FTX Was Using Customer Funds
Trading firm Alameda’s troubles helped lead to the bankruptcy of crypto exchange
FTX

FTX CEO Sam Bankman-Fried appeared at a Senate committee hearing on cryptocurrencies earlier this year.
PHOTO: SARAH SILBIGER/BLOOMBERG NEWS

By Dave Michaels Follow , Elaine Yu Follow and Caitlin Ostroff Follow

Updated Nov. 12, 2022 2:42 pm ET

Alameda Research’s chief executive and senior FTX officials knew that FTX had lent its
customers’ money to Alameda to help it meet its liabilities, according to people familiar with
the matter.

Alameda’s troubles helped lead to the bankruptcy of FTX, the crypto exchange founded by
Sam Bankman-Fried. Alameda is a trading firm also founded and owned by Mr. Bankman-
Fried.

Alameda faced a barrage of demands from lenders after crypto hedge fund Three Arrows
Capital collapsed in June, creating losses for crypto brokers such as Voyager Digital Ltd., the
people said.
In a video meeting with Alameda employees late Wednesday Hong Kong time, Alameda CEO
Caroline Ellison said that she, Mr. Bankman-Fried and two other FTX executives, Nishad
Singh and Gary Wang, were aware of the decision to send customer funds to Alameda,
according to people familiar with the video. Mr. Singh was FTX’s director of engineering and a
former Facebook employee. Mr. Wang, who previously worked at Google, was the chief
technology officer of FTX and co-founded the exchange with Mr. Bankman-Fried.

Ms. Ellison said on the call that FTX used customer money to help Alameda meet its liabilities,
the people said.

Alameda had taken out loans to fund illiquid venture investments, the people said.

On Friday, FTX, Alameda, FTX US and other FTX affiliates filed for bankruptcy protection.

Bankruptcy means that it could be a long time before individual investors and others owed
their funds are able to potentially recover any of them, if ever.

Ms. Ellison didn’t return a phone message and an email seeking comment. Messrs. Singh and
Wang didn’t respond to multiple messages seeking comment. Ryne Miller, FTX US’s chief
legal officer, declined to comment.

Write to Dave Michaels at dave.michaels@wsj.com, Elaine Yu at elaine.yu@wsj.com and

Caitlin Ostroff at caitlin.ostroff@wsj.com

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